There were two fundamental strategic moves by Comcast in 2011: the closing of the NBCU joint venture deal with GE in January, and the startling announcement in December of a plan for it and several other cable companies to sell their wireless spectrum to Verizon Wireless and set up a reselling and cooperative relationship with the wireless carrier, including an "innovation joint venture" that would reportedly be based in Philadelphia. The proposed Verizon Wireless deal could dramatically alter the traditional competitive delineation between the Cable and Telco worlds, and is likely to draw close regulatory scrutiny and, if approved, will probably carry tight limitations on the extent to which they can cooperate. The move reflected recognition of the reality that Cable needed to have a hand in the wireless game, not so much for the so-called "quadruple play", but because through 4G LTE wireless will be an important piece of the "TV Everywhere" and broadband puzzle. Clearwire, in which Comcast had invested, clearly hasn't worked as a stand alone entity, and the cable companies didn't feel they could achieve (nor did they need) the neccessary scale to be competitive on their own in wireless.
As expected, with the NBCU joint venture in place Comcast moved to reorganize its sports properties, putting Versus and Comcast's regional sports networks under the NBC Sports umbrella. Versus, to be renamed the NBC Sports Network on January 2, will move from Philadelphia to Stamford, Connecticut where NBC Sports will be based. Comcast paid dearly to maintain its Olympic rights, extend and enhance its NFL and NHL rights, and gain the US Spanish language rights for the World Cup. Legendary NBC Sports head Dick Ebersol lost out on a power play and left, to be replaced by Mark Lazarus, although he did return to consult on the Olympics and Sunday Night Football.
Comcast Interactive Ventures was renamed Comcast Ventures and left Philly for San Francisco with an expanded scope, although it retains a Philadelphia office.
SAP AG, which has its North American headquarters in Newtown Square, closed 2011 by announcing the $3.4 billion acquisition of SuccessFactors, making a major entry into the Cloud space as its own internal efforts were slow to penetrate the market. SuccessFactors CEO Lars Dalgaard will manage his company as an independent entity within SAP in addition to being responsible for SAP's overall Cloud strategy, including its Business ByDesign and OnDemand platforms.
SAP's other big push for the year was the rollout of its HANA in-memory data processing platform, which is now intended to be not just a real-time analytics tool but an environment for running its ERP suites and a possible replacement for relational database management systems all together. An SAP executive recently predicted that it could be the #2 player in the database management market by 2015, through HANA and its Sybase products. While analysts are impressed by HANA's potential, there is skepticism by some on how far along the offering is and how easy and affordable it is to deploy.
Federal judge Phyllis Hamilton threw out the $1.3 billion jury verdict awarded in November 2010 against SAP in Oracle's TomorrowNow lawsuit, reducing the amount to $272 million and insisting upon a new trial unless Oracle agrees to accept the lesser amount. SAP also pled guilty and paid a fine in a criminal case against TomorrowNow.
Oracle missed earnings estimates for its quarterly results released in December, a shock because it rarely falls short, sending many other enterprise software stocks downward and raising questions about what to expect from SAP's quarterly results to be announced in January. And Cloud vendor Workday, considered by many to be the biggest emerging competitive threat to SAP, is said to be planning a 2012 IPO.
The SAP/Oracle soap opera extended to HP, as former SAP CEO Leo Apotheker, who was pushed out in early 2010, ended up running HP before getting a quick and expensive pink slip there in October as the company seemed to be without direction. Apotheker replaced Mark Hurd at HP, who had been forced out under a cloud of scandal and ended up becoming a top lieutenant to Larry Ellison at Oracle. Meanwhile, SAP's top cloud architect, John Wookey, abruptly left SAP in the Spring and landed later in the year at Salesforce, where he will be responsible for its Rypple acquisition (to be renamed SuccessForce, for whatever reason). Musical chairs in the enterprise software business never stop.
SunGard Data Systems announced in August it would sell its Malvern-based Sungard Higher Education unit, which provides ERP systems to colleges and universities, to PE firm Hellman & Friedman LLC for $1.775 billion. Hellman & Friedman in turn will combine it with Virginia-based competitor Datatel. The deal, which is expected to close early next year, raises questions as to whether there might be a further breakup of Wayne-based SunGard.
Radnor-based QlikTech, the in-memory business intelligence software vendor which did its IPO in July 2010, saw its share price actually decline 5% so far in 2011 despite continued strong growth. It expects revenue for the year of $315 to $320 million, up close to 50% over last year, though it has been operating barely at a breakeven level. Ewing, NJ-based Universal Display, a pioneer in the OLED technology market, is up 13% for the year and has a market value of $1.6 billion, though it was a bumpy year as the stock was constantly buffeted by rumor and speculation as to what deals it might have in the works. Quality Systems Inc., parent of Horsham-based NextGen Healthcare, continues to show strong growth as government subsidies for physicians who adopt Electronic Healthcare Records (EHRs) kick in, though some were concern about the impact of NextGen co-founder and Quality Systems President Patrick B.Cline's announced resignation earlier this year.
Shortly after eBay veteran Josh Kopelman joined its board, King of Prussia-based GSI Commerce was acquired by eBay in March for $2.4 billion. GSI Commerce founder Michael Rubin ended up with a new holding company called Kynetic (in which eBay has a stake), which includes Amazon Prime competitor ShopRunner, flash sales sites Rue La La, and its sports merchandising business.
King of Prussia-based wireless technology developer InterDigtal put itself up for auction in July after Nortel's
big patent sale set off a goldrush for wireless patents, but after a huge initial bump for its stock nothing has
happened yet despite rumors (that revived in December) that Google, Apple and others were looking at it. InterDigital's stock is slightly higher on the year. Google did swallow up Motorola Mobility for $12.5 billion, although the deal awaits European regulatory approval. In addition to Moto Mobility's wireless technology, the deal would also include its Horsham-based set-top box business, which may contribute to Google's emerging TV strategy. Some observers still believe that Google will ditch the hardware manufacturing part of the business some time after the deal is approved.
French advertising giant Publicis expanded its digital marketing presence by acquiring Hamilton, NJ-based Rosetta Marketing for $575 million in May. Later in the year Publicis reorganized its health marketing business , combining Philly-based Digitas Health and Razorfish Health and some other Publicis units based in Yardley under its New York-based Publicis Healthcare Communications Group. Digitas Health co-founder David Kramer retired. Rosetta, which also has a sizable healthcare presence, remains independent within Publicis.
Boston-based OpenView Ventures Partners made a big splash into the Philly VC scene, investing $10 million plus
in each of three area ventures: Monetate, NextDocs and Xtium. Gabriel Weinberg's solo startup, search engine DuckDuckGo, gained significant publicity and traffic and a subsequent $3 million funding round led by prominent
New York VC firm Union Square Ventures. "Internet Of Things" startup ThingWorx of Exton raised $5 million from
Safeguard Scientifics, and Lancaster-based appMobi, which grew out of streaming radio app FlyCast, emerged as a significant player with its HTML5-based mobile app development platform. RJMetrics, which at the beginning of 2011 moved from Camden into larger Center City offices, announced at the end of the year they were expanding again into even larger Center City offices.
Some ventures left town: genome analysis startup BioNanomatrix (now BioNano Genomics) moved its headquarters from Philly to San Diego after raising $23 million, though they still have some staff here. Coursekit, which started at Penn, got funded and moved to New York, and two brothers both moved their startups: PlaySay founder Ryan Meinzer got funding and moved to DC, while CityRyde co-founders Timothy Ericson and Jason Meinzer got funded and moved the company, which has been renamed Zagster, to Cambridge, MA. Unified Communcations provider Alteva was acquired by a small New York state telco, although the bulk of Alteva's business remains in Philly for now.
VC fundraising (the amount raised by VC firms nationwide) hit its lowest level in eight years in the third quarter of 2011, although some say those numbers don't fully account for increased seed and angel funding. But sounding a note of caution, First Round's Capital's Kopelman recently said, “I think 2012 will look more like 2008 than 2011".
Teen social network myYearbook, which was backed by First Round, was acquired by Quepasa for $100 million, mostly in Quepasa stock. The combined company, based in New Hope, looks more like myYearbook than Quepasa, but it does give the company a publicly traded stock vehicle. Other significant exits in the area during the year included Safeguard portfolio company Portico Systems (McKesson, $90 million), Sashi Reddi's AppLabs (CSC), and MobileMD (Malvern-based Siemens Healthcare).
Philly Startup Leaders got a revived sense of direction when Dell Boomi's Bob Moul was named President.
Moul, along with Rick Nucci, led Boomi's growth and its acquisition late last year by Dell, which has made Boomi
a centerpiece of its Cloud strategy. Now having left Dell, Moul has immersed himself in the Philly startup scene. DreamIt Ventures started a New York program, but despite some concerns its Philly program seemed as strong as ever this year, and with Comcast's help it was able to bring five minority-founded ventures into its 2011 class. A new business accelerator, Novotorium, launched late this year in Langhorne. And Philadelphia Media Network's Project Liberty aims to be an incubator for new media startups. Technically Philly's Philly Tech Week drew a big response, as have the monthly demo sessions held by Philly Tech Meetup. And New Jersey Tech Weekly, a new website covering the Garden State, added to the area's tech coverage.
Yardley-based Journal Register CEO John Paton's "Digital First" strategy was credited with turning around that troubled chain, and he went on to head up the larger MediaNews chain. Philadelphia Media Network's Droid tablet introduction appears to have fizzled out, however. Comcast, as one of its commitments growing out of the NBCU joint venture deal to team up with some non-profit local news organizations, entered into a working relationship with WHYY.
Liberty Media completed a financial restructuring and split-off in September which leaves QVC as the primary asset of Liberty Interactive, which is now an asset-backed stock as opposed to a tracking stock as it was previously. This move makes it more likely that Liberty can be more aggressive in expanding and building around QVC, including possibly acquiring the 70% of HSN (Home Shopping Network) it does not own. Liberty Media continues to own a broad collection of assets include Berwyn-based TruePosition Inc. and the Atlanta Braves.
The Supreme Court ruled in favor of IMS Health and other Philly-area pharmacuetical data gatherers by striking down a Vermont law that would have restricted their ability to collect and use data on physicians' prescribing behavior for marketing purposes.
Malvern-based USA Technologies booted its CEO after he was found to have been posing as an investor on the Yahoo
message board for his company and touting its stock. And Nokia Navteq's Malvern operation, which grew out of Traffic.com, was saved from closure by a Utah company that acquired it and formed a new company named Radiate Media .